Short #58 – A Fair Price
In this short podcast episode, Bryan covers pricing for HVAC/R parts and services; he explains how to come up with a fair price.
To be able to price fairly, we need to understand what value and sacrifice look like. In the HVAC industry, we value hard work and growth in a way that some other people don't. We provide parts and labor and sell those in the free market, so we can control how much we charge for those.
The price of a part means NOTHING in the industry. Instead, we primarily set prices based on labor, which is much more value-based. The customer has the right to accept or decline the service based on the price, and some customers WILL decline the service based on price. In the end, the customers can choose to agree or disagree with your opinion of value.
Some people will object to the idea that customers know what a price is truly worth. However, Bryan is of the school of thought that almost no price is “unfair.” As long as the customers have different companies to choose from, they have the right to shop around and pick a price that works for them. It is not the responsibility of the company to reduce its prices to attract customers. Remember, you need to think about pricing in terms of value and honesty; customers who also value your work will pay for it. If your services are superior, there is nothing wrong with keeping your prices high to reflect the value of your work.
Bryan also covers:
- Learning about economics
- Supply and demand vs. price gouging
- Reinvesting in the business
- Sales vs. technical excellence
- Markup vs. gross margin
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